The prohibition on monetary financing restricts the central bank financing of institutions within the public sectors of the EU and member states, thereby strengthening the budgetary discipline and the commitment to price stability as the primary objective of monetary policy. However, compliance...

This paper provides an overview of the impact of unconventional central bank instruments, the relevant international experiences and the room for application in Hungary. The use of unconventional instruments may be justified by the existence of financial market friction, turmoil, failure or...

The instruments applied by the ECB and the Fed1 during the crisis were based on similar principles, but as the ECB and the Fed function in different financial intermediary systems, they relied on different tools to respond to different types of challenges. Both institutions increased liquidity...

The high dependency of the domestic banking sector on foreign funds and its open on-balance-sheet foreign exchange position, as well as the considerable increase in sovereign and parent bank credit risk premia due to the sovereign debt crisis, warrant a more accurate mapping of the pricing...

The financial crisis revealed that – due to the reliance of the Hungarian banking sector on external funding – the deterioration in the liquidity position can be a significant obstacle to lending in spite of the ample forint liquidity at the system level. The Magyar Nemzeti Bank introduced...

MNB has received daily, transaction-level data on key Hungarian interest rate derivatives markets since the beginning of 2009 with the launching of the K14 report. The dataset that has accumulated since early 2009 provides an opportunity to better comprehend the structure and functioning of...

As a result of the early repayment programme launched in the autumn of 2011, buying demand for several billions of euros arose on the side of domestic banks. The purchase of such amounts in the foreign exchange market would have alone contributed to a substantial weakening of the forint;...

Our paper explores the risks that arise due to indebtedness of Hungarian local governments. Our analysis relies on interviews conducted with the heads of the local government business branches of the credit institutions most important in terms of local government financing and on the related...

This article explores the risks that arise as local governments become indebted. The article is based on interviews conducted with the heads of the local government business branches of the most important credit institutions in terms of local government financing, as well as related data, such...